The South African Reserve Bank Governor, Lesetja Kganyago, has announced that the repo rate will be raised by 50 basis points to 7.75% on Thursday.
The increase in the repo rate to 7.75% raises the interest rate charged by banks to 11.25%.
Against this backdrop, the MPC decided to increase the repurchase rate by 50 basis points to 7.75% per year, with effect from the 31stof March 2023. Three members of the Committee preferred the announced increase. Two members preferred a 25 basis points increase. #MPCMARC2023 pic.twitter.com/LMAKRvH77a
— SA Reserve Bank (@SAReserveBank) March 30, 2023
The central bank says it’s trying to bring inflation under control. Kganyago says for the foreseeable future, economic and financial conditions are expected to remain more volatile.
“In this uncertain environment, monetary policy decisions will continue to be data dependent and sensitive to the balance of risks to the outlook.”
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The repo rate is set by the Reserve Bank’s Monetary Policy Committee and is the rate at which the Reserve Bank lends money to the country’s commercial banks.
Kganyago says the rise in South Africa’s headline inflation rate has been shaped primarily by fuel, electricity and food price inflation. The SARB uses interest rates to influence the level of inflation.
